What is the Right Supply Chain for your product?

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Transcript of What is the Right Supply Chain for your product?

Product Life CycleWhat are the different aspects that managers face to devise an effective supply chain for their company?According to Fischer, the first step to devise an effective supply chain is to classify products on the basis of their demand patterns.How do you devise an Ideal Supply-Chain Strategy?On the basis of their demand patterns, they fall into one of two categories- 1) Functional Products 2) Innovative ProductsIs your product functional or innovative?What is the right Supply Chain for your product?By Marshall L. FischerWith high profit margins and volatile demand, Innovative products require a fundamentally different supply chain than stable low margin functional products do.What kind of function does your supply chain perfom?How do you devise an Ideal Supply-Chain Strategy?Demand Predictability Product VarietyMarket Standards for Lead Time & ServiceWhat is the first step to devising an effective supply chain strategy?Functional ProductSatisfy basic needsStable predictable demandLong life cyclesLow product varietyInnovative ProductUnpredictable demandShort product life cycleHigh product varietySupply Chain FunctionsPhysical Function

Market Mediation FunctionFunctional versus Innovative ProductsPhysically Efficient versus Market-Responsive Supply ChainsStep 1Step 2How do you devise an ideal supply chain strategy?Step 3Matching Supply Chains with productsIs your company's supply chain suffering from Schizophrenia?This phenomenon explains why one finds so many broken supply chains- or unresponsive chains trying to supply innovative products- in industries such as automobiles, personal computers, and packaged consumer goods.Efficient Supply of Functional ProductsContinuous Replenishment Strategy (also known as Vendor Managed Inventory - VMI) is a vital tool in the implementation of the Efficient Consumer Response (ECR) strategy. Campbell's continuos replenishment program embodies a model in which the manufacturer and retailer co-operate to cut costs throughout the chain thereby increasing the size of the pie.Responsive Supply of Innovative ProductsAccept the uncertainty of demandContinue to strive to Reduce uncertaintyAvoid uncertainty by cutting lead times & increasing supply chain flexibilityHedge against the remaining residual uncertainty with buffers of inventory or excess capacityRESPONSIVESUPPLY CHAIN